Sunday 11 December 2016

Nama claims fears over Brexit are driving investors to Ireland

Peter Flanagan Commercial Property Editor

Published 22/04/2016 | 02:30

US investors Goldman Sachs, Cerberus and CarVal are all known to have bid for at least part of the Emerald and Ruby portfolios. Photo: Reuters
US investors Goldman Sachs, Cerberus and CarVal are all known to have bid for at least part of the Emerald and Ruby portfolios. Photo: Reuters

Brexit fears are pushing investors back to Ireland and driving interest in Nama's latest portfolio sales, the State bad bank's head of strategy has claimed.

  • Go To

Sean O'Faolain told the Irish Independent that the UK market has effectively stopped until after the referendum on whether Britain should leave the EU, and buyers who had perhaps moved on from the Irish market were now showing renewed interest in this country.

His comments came as bidders for Nama's Project Emerald and Project Ruby portfolios submitted their first round offers for the two loan bundles.

"There is very strong interest in Ireland still, not least because the UK is pretty much frozen in terms of activity at the moment.

"Fear around Brexit has meant the stuff is not going on the market [over there].

"It has also meant that these funds are quite cautious about where they spend their money and this has worked to our benefit to some extent but [a number of well known funds] have been looking over here as a way of investing in Europe," Mr O'Faolain said.

US investors Goldman Sachs, Cerberus and CarVal are all known to have bid for at least part of the Emerald and Ruby portfolios.

The Nama executive's comments tally with evidence from Britain that investors are growing increasingly leery about spending money there before the referendum in June. Firms looking to do deals there are now reported to be seeking "Brexit clauses" in contracts being put together ahead of the referendum.

Speaking at the Chartered Institute of Management Accountants in Dublin, Mr O'Faolain added that while private equity firms had left Ireland in search of better value in the likes of Spain and Italy, the sometimes Byzantine court mechanisms in those countries had made them less attractive destinations that Ireland.

Nama has endured a torrent of criticism throughout its existence because of its lack of a so-called "social mandate", instead selling its assets to the highest bidder.

However, Mr O'Faolain believes that an emphasis on the commercial return has lessened the political pressure on the agency.

"The problem with the social mandate would have been how do you decide what is the priority [in terms of the social and commercial requirement] and you could have ended up being subject to political pressure and all that".

Nama has land to provide up to 20,000 homes for social housing although it has admitted previously that about 7,000 of those are not commercially viable at present.

Mr O'Faolain said the unviable sites were being worked by the agency so obstacles such as getting them hooked up to the water supply and providing access could be overcome. He admitted though that it will take prices rising to make some of the sites currently earmarked as unworkable commercially viable.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business